Many people wish to remain in their homes as long as possible. Maybe it’s the first home they’ve ever bought or they value their independence? No matter what attachments people have to their home, once that final mortgage payment is made and you get ready to embark on your retirement journey, you may ask yourself, “Is there still value left in my home?”

A reverse mortgage is a loan available to people who are at least 60 years old. The loan is based on the assessed value of your home. Unlike a regular, residential mortgage, the assessment is not based on your credit rating or income – you may not have any income coming in, especially if you are retired – but it is based on how much the house is valued and your current age. Lenders can then predict how long you can hold the loan and if the value of your home will change during that time period. If you live in a populated area like Toronto, the value of your home is expected to increase over time leading you to be eligible for a higher loan.

Like any mortgage, you do have to repay your loan. Conversely, with a reverse mortgage, the total loan amount and the interest it accumulates is only repaid in full after the sale of your home, either when you sell it yourself or when your estate is settled after you’ve passed away. You do not have to make a single payment before that.

Additionally there are no monthly or bi-monthly mortgage payments to take care of, which after you reach a certain age, bills are probably the last thing you want to concern yourself with. You can make occasional payments of interest or put money towards the principal. However, most people opt to repay the lump sum at the end.

Reverse mortgages allow you to receive your funds as a lump sum or over time. Another benefit to a reverse mortgage is that there are no spousal or medical qualifications. You do not have to be married to be eligible for a reverse mortgage. You don’t even have to be in good health. Although, we hope that you are!

If you are married or in a common-law relationship, the loan period can be extended to the lifetime of both spouses instead of just the oldest partner. If you are 60 years old or over but your partner is not, as long as they are at least 55, you are eligible for a reverse mortgage.

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